Business Miles Deduction
The IRS allows S Corps, Schedule C taxpayers, Partnerships, and C Corporations to deduct business mileage. In order to deduct business mileage, a taxpayer must keep a log of the miles and document the log with the business purpose of the trip. The best way to document mileage is by use of a smart phone app. These apps track your miles when they sense you moving at certain speeds. Please see the end of this article for a MileIQ discount code. Another acceptable method is the use of handwritten mileage logs. The log should contain the date of the trip, the miles driven, and the business purpose of the trip.
The easiest and best way to track miles is to record them daily. Should you get to the end of the tax year and need to reconstruct your mileage log, it is best to do so immediately. You can use things such as your calendar, bank records, emails, and other notes to reconstruct your mileage log, but time is of the essence. If you wait until you are audited to reconstruct your mileage log, you are at the mercy of the IRS. It's best to get in the habit of tracking miles daily.
As mentioned in the first paragraph, different legal entities and business forms are allowed to deduct mileage, but each business entity has additional requirements. Schedule C taxpayers and Partners are only required to keep the mileage log. S Corp and C Corp owner/employees are required to reimburse owners through the implementation of an accountable plan. Please see our article on accountable plans here: https://www.cumminggacpa.com/single-post/accountable-plan